If you’re an executive, you can diversify by building business relationships within a different discipline in your company or by volunteering for an initiative.

Alternatively, you could work for like-minded peers in a different industry as part of a side-hustle.. This way if you don’t get a promotion or your company downsizes like IBM did in the 1990s, you have a backup plan.

What To Avoid When Diversifying

A rich coffee distributor once invited renowned commodities trader Larry Hite to his house in London. The distributor asked Hite about trading coffee, explaining he knew almost everything about the industry.

Hite's advice, as recounted in Market Wizards, was simple: Manage the risks involved.

Three months later, Hite discovered this distributor turned coffee trader had lost more than $100 million.

Instead of going all in on one trade, successful traders like Hite typically allocate no more than 5% of capital to a particular trade. This approach frees them up to diversify.

"First, if you never bet your lifestyle … nothing bad will ever happen to you. Second, if you know what the worst possible outcome is, it gives you tremendous freedom,” Hite said.

When To Stop Diversifying

You might not be a trader, but creating an offer or taking on a project shouldn’t consume so much of your resources that you risk the fundamentals of your business or career.